Supervisor Nguyen disputes grand jury's CalOptima report

Jan. 30, 2013

Updated Aug. 21, 2013 1:17 p.m.

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Supervisor Janet Nguyen speaks to the media in Santa Ana Wednesday. Supervisor Nguyen called the press conference to "set the record straight about CalOptima and the grand jury report." JOSHUA SUDOCK, ORANGE COUNTY REGISTER

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Supervisor Janet Nguyen speaks to the media in Santa Ana Wednesday. Supervisor Nguyen called the press conference to "set the record straight about CalOptima and the grand jury report." JOSHUA SUDOCK, ORANGE COUNTY REGISTER

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Supervisor Janet Nguyen speaks to the media in Santa Ana Wednesday. Supervisor Nguyen called the press conference to "set the record straight about CalOptima and the grand jury report." JOSHUA SUDOCK, ORANGE COUNTY REGISTER

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Supervisor Janet Nguyen speaks during a press conference in Santa Ana Wednesday. Supervisor Nguyen called the press conference to "set the record straight about CalOptima and the grand jury report." JOSHUA SUDOCK, ORANGE COUNTY REGISTER

Supervisor Janet Nguyen speaks to the media in Santa Ana Wednesday. Supervisor Nguyen called the press conference to "set the record straight about CalOptima and the grand jury report." JOSHUA SUDOCK, ORANGE COUNTY REGISTER

SANTA ANA – County Supervisor Janet Nguyen hit back Wednesday at a grand jury report that criticized her role in triggering what it described as an implosion of Cal-Optima, the county's public health plan for the poor and disabled.

Nguyen pointed out what she said were errors in the report, while portraying herself as having rescued and overhauled an organization that she described as having been badly mismanaged before she joined its board of directors nearly two years ago.

The grand jury "failed in its mission and completely missed the mark," Nguyen said at a news conference in the county's Hall of Administration. "Everyone rushed to judgment ... no one has done their homework."

CalOptima, Orange County's administrator of the federal Medicaid (known as MediCal in California) program, provides health insurance for 427,000 county residents, including about one in three children.

The grand jury report, released Friday, depicted CalOptima as a troubled organization that has lost 16 top executives since Nguyen joined its board in March 2011. Every member of CalOptima's board has been replaced with candidates backed by Nguyen since she became the sole representative of the county's Board of Supervisors to sit on it.

Nguyen said the grand jury erred when it wrote that lobbyists with the Hospital Association of Southern California helped to rewrite the county's ordinance governing CalOptima to give more control to health care providers and less to CalOptima's members. The grand jury cited the existence of "an email trail" documenting the hospital association's March 2011 involvement.

Actually, Nguyen said, the email trail shows the hospital association's involvement in a different revision of the ordinance that the Board of Supervisors approved in April 2011, which wasn't the one that changed the composition of CalOptima's board. "The grand jury mixed up two different actions," she said.

Pointing out that agenda reports about the two revisions – the one in April and the one in December 2011 that changed CalOptima's board – are available on the Board of Supervisors' website, she said "it's clear that the grand jury did not even bother to conduct a full investigation or take the time to understand the ordinance that governs CalOptima."

The grand jury pointed to a $250-a-plate campaign fundraiser for Nguyen that the hospital association helped organize at the home of a hospital CEO. The fundraiser was held in February 2012, two months after the CalOptima ordinance was revised to restructure its board of directors.

Nguyen denied any connection between the ordinance change and the fundraiser. She also denied that the change gave more control to health care providers, pointing out that the same number of seats – three – were reserved for providers before the change and after it. However, the change gave hospitals a permanent seat on the board, something they did not have before.

She described CalOptima's board before she joined it as "a rubber-stamping board" and said the organization was wasting millions of dollars and "created a culture of backroom dealing."

CalOptima is still paying $1 million a year to lease vacant space in its former office building even after purchasing another building two years ago for $30.2 million, which it now occupies. At Wednesday's news conference and in an op-ed in Tuesday's Orange County Register, Nguyen cited this as an example of waste.

County Supervisor John Moorlach, who served on CalOptima's board for four years, defended the building purchase, saying the cash transaction reduced the organization's overall occupancy costs although it had to keep its lease at the former building.

"I would challenge her to find any commercial real estate professional who will tell me to my face that it was not a very propitious acquisition at a very good time in the market cycle," Moorlach said in an interview.

Shawn Nelson, chairman of the Board of Supervisors, said the grand jury report would have been more useful if the jurors had interviewed Nguyen. Nguyen has said the jurors scheduled an interview with her in August but canceled it.

"We started with 'he said, she said,'" Nelson said, and even after the report "we're still at 'he said, she said.'"

The Board of Supervisors will likely take up the issues raised by the grand jury at one of its meetings in February, Nelson said.

*CORRECTION: CalOptima lists its office building on its balance sheet at $39 million, reflecting the cost of the building, land and improvements. Because of a reporting error, the figure was mischaracterized as a valuation in an earlier version of this article.

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